Grain and oilseeds futures were mostly lower on Friday;

• Chicago wheat July contract was down 0.5c/bu to 526;
• Kansas wheat July contract was down 8c/bu to 452.5;
• Minneapolis wheat September contract down 2.25c/bu to 536;
• MATIF wheat September contract up €0.75/t to €180.75
• MATIF rapeseed August contract was down €1.25/t at €368.75
• Winnipeg canola July contract down $C2.40/t to $C453.40
• Corn July contract down 7.75c/bu to 442.25;
• Soybeans July contract down 12.75c/bu to 902.75;
• Crude oil August contract up US$0.36/barrel to $57.43
• Dow Jones down 34.07 points to 26,719.13
• AUD up to 0.6950
• CAD down to 1.3199
• EUR up to 1.1381

Market wrap

Grain markets continued to trade back into Friday in the US, with Chicago wheat off half a cent to 526, KC off 8¢ to 452.5¢, Minny -2 ¼¢ to 536¢, and Matif was up ¾€ to 180 ¾ on the earlier close.  Matif rapeseed gave up a euro and a quarter to 368 ¾€ and Winnipeg canola was off $2.4 to $453.4.  Crude oil continues to firm slightly, even as the DOW inched down 34 points.  Potential retaliatory US strikes on Iran grabbed headlines – after the news broke that they’d been cancelled at the last minute.  Lots of questions are being asked about the situation there (and news this week suggesting that cyber-attacks were carried out instead), leaving macro markets slightly on edge.

A reminder that this Friday evening will be the upcoming USDA acreage report, in addition to the first notice day on July futures. Although this will not be the final say on US acreage (given the survey dates), it’s likely to bring some significant volatility to the market with the combination of the report and upcoming futures delivery.

World news

Continuing on the political front, we do note that the meetings at the G20 between US President Trump and China’s Xi Jinping will be closely analysed this week. It’s yet to be determined whether there will be any significant breakthroughs on the trade disputes.  With the Hong Kong protests last week, and potentially set to continue into this week, there is a lot of speculation about how much if any internal pressure is on Xi to make a deal. Trump, of course, remains a wild card in any discussions.  Meanwhile, making headlines are comments from a former Canadian politician suggesting that Canada needs to take a stronger stand against Chinese actions in the ongoing canola/pork/Huawei disputes.

Hot, hot weather across much of EU and the Black Sea is once again raising concerns on crops there.  Most of the southern Black Sea wheat and barley crops are past the point of significant concern, but Ukrainian corn and some of the later maturing wheat fields will need to be watched.  Meanwhile, early wheat harvest results published by the government in Ukraine are showing an 8 per cent improvement in yield versus last year, but on very limited acreage so far.  Droughts in East Africa are also starting to grab attention, with expectations that local production problems there will eventually prove supportive for further food imports.
In contrast, speculation remains rampant about the US row crop situation – with various mini-crop tours through last week providing plenty of fodder for concerns and noting the significantly delayed nature of the fields that did get planted (increasing risk to yields with the crop maturity pushed further back into the late summer heat).  Markets have so far ignored those concerns, but various agronomic yield estimate are suggesting that we could see 20-30 bu/acre yield losses.  So far we’re a long way away from realising anything like that, but the concerns are likely to resurface in coming weeks as crops begin filling in. There is at least one week of dry weather on the forecast for the mid-west corn belt areas, but longer-term models are throwing in the potential for some renewed rains into later next week. We’ll see how models evolve in coming days.

Australia

The forecast rains we discussed last week are set to move into the WA wheat belt later this week, with 15-20 mm on the maps for much of the Geraldton and Kwinana zones through Thursday and Friday.  Weather models are drier over towards Esperance, but there is now an improved chance of moisture for the Yorke Peninsula and southern edge of the Eyre Peninsula in SA, and moving across through most of Victoria into later this coming weekend.  Longer term maps are also pushing a chance for some showers on the Downs into next week, but still a long way away.